Fixed deposit is among the safest investment instrument that provides decent returns to its investors. For opening a fixed deposit account with the bank, you need to produce documents such as ID and address proof as well as PAN card.
So, as with other financial transactions that require quoting of PAN, herein also you need PAN. Income tax department has made PAN mandatory for processing of income tax return. Also, you cannot deny the fact that the important ID helps you save your hard earned money. Hence if you have opened a fixed deposit with any bank and provided your PAN card, you may save on taxes. Else in the other case, when PAN is not produced at the time of opening the fixed deposit account, you will have to shell out taxes on your income from fixed deposit.
Here are the implications of opening a fixed deposit account without PAN:
1. TDS or tax deduction at source will be at the rate of 20% as against 10%
2. TDS certificate will not be issued.
3. There shall be no TDS credit from the department of Income tax
4. Exemption certificates including Form 15G/ Form 15H will be held invalid. Also there will be levied penal TDS.
In case of HDFC Bank, if the FD value per customer ID including the new FD account being opened is less than or equal to Rs. 50,000, PAN as well as Form 60 is not required. Nonetheless, where the FD value per customer ID exceeds Rs. 50,000 in value (that includes the new FD account being opened), PAN is to be furnished compulsorily.